In Edit mode, when I dismiss the keyboard, scroll to another location in the document, and then tap, the insertion point appears in its last location, not where I tapped, and the window scrolls to the insertion point location, forcing me to scroll once again to find my desired edit location. This is annoying, disconcerting, and unexpected behavior on iOS.
That’s not the Preview button — it’s shaped like a keyboard, it dismisses the keyboard, and it does not trigger Preview mode. There is no “hide” button on the keyboard on iPhone. I’ll try the button you mean on iPad to see what happens.